Borrelia burgdorferi, the infectious agent of Lyme disease, is transmitted to mammals through the bite of infected Ixodes ticks. Our broad objective is to use a genetic approach to elucidate the molecular mechanisms of adaptation and variation in B. burgdorferi and their roles in the infectious cycle. B. burgdorferi contains abundant circular and linear plasmids and there is growing evidence that these plasmids carry genes critical for survival in, or transmission to, the tick or mammalian host. Despite the significance of B. burgdorferi plasmids to its life cycle, relatively little is known about the mechanisms of plasmid replication and partitioning. A major limitation in the analysis of plasmid maintenance has been a lack of tools available for genetic manipulation of B. burgdorferi. To address these issues, a B. burgdorferi 9 kb circular plasmid (cp9) was amplified in its entirety by the polymerase chain reaction and used to construct a shuttle vector that replicates in Escherichia coli and B. burgdorferi. A 3.3 kb region of cp9 containing three open reading frames was used to construct a smaller shuttle vector, designated pBSV2. This vector was maintained in B. burgdorferi, indicating that all elements necessary for autonomous replication are located on this plasmid region. Infectious B. burgdorferi was successfully transformed by pBSV2, indicating that infectious strains of this important human pathogen can now be genetically manipulated. Introduction of pBSV2 and shuttle vectors based on homologous regions of other B. burgdorferi plasmids selectively displaced the resident plasmids in B. burgdorferi from which they were derived, demonstrating incompatibility. This presents a means to cure B. burgdorferi of specific plasmids in order to assess their contributions to infectivity and pathogenicity. Complementation of defects can be tested by restoration of individual genes on the shuttle vector. An unusual feature of the B. burgdorferi genome is the presence of a linear chromosome and linear plasmids containing covalently closed hairpin ends (telomeres). We have investigated the mechanism of telomere resolution in B. burgdorferi with a synthetic putative DNA replication intermediate. This sequence functioned as a viable substrate for telomere resolution in vivo, and was sufficient to convert a circular replicon to a linear form. Results suggest that covalently closed hairpin ends are generated as a final step in replication of linear B. burgdorferi plasmids and involves a telomere resolution step with a site-specific DNA breakage and rejoining reaction. The definition of a functional telomere in B. burgdorferi is a new and valuable tool for genetic manipulation of linear plasmids and for the identification and characterization of the enzyme with telomere resolving activity.